Rio Tinto cranks up iron ore output

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Global miner Rio Tinto boosted iron ore production in the June
quarter but coal production has again been hampered by transport
bottlenecks.

The miner was concentrating on expanding iron ore output in
order to take advantage of the 71.5 per cent contract price rise
that came into effect in the quarter. Total iron ore production was
32.17 million tonnes, up 16 per cent on the previous quarter.

Rio said its Hamersley operation had produced 22.846 million
tonnes of iron ore, 22 per cent more than in the first quarter.

But production at its Robe River operation was down 1 per cent
on the previous quarter, affected by heavy rainfall and a planned
shutdown to allow expansion work.

Alumina production for the quarter was a record 779,000 tonnes,
51 per cent more than for the June quarter 2004, as the ramp-up of
the new Comalco alumina refinery continued. Aluminium production
was 213,300 tonnes, up 2 per cent on the previous quarter.

Hard coking coal production in Australia was 1.95 million tonnes
for the quarter, 7 per cent lower than for the same period in
2004.

Production of other coal in Australia was 7.30 million tonnes, 9
per cent lower than the previous quarter and 15 per cent lower than
the June quarter of 2004.

The miner said its Australian coal production was constrained by
port and rail capacity, but a new queue management system at
Dalrymple Bay in Queensland had begun to reduce the queue of ships
waiting to be loaded.

The quarter saw strong diamond production of 10.99 million
carats, up 172 per cent on the June quarter of 2004. Rio Tinto said
most of its operations had run at or near capacity in the
quarter.

Intersuisse resources analyst Gavin Wendt said it was a strong
result the market had expected and iron ore was the key.

"The fact that iron ore is going along so strongly is, I think,
a very good indication that we will be looking towards a very solid
profit number from Rio," he said.

Mr Wendt said Rio seemed to have turned around its Kennecott
operations in the US, which had been its "Achilles heel" in the
past.

But Daiwa Securities resources analyst Mark Pervan was less
impressed. Mr Pervan said the lift in iron ore and aluminium had
been expected but the coal and copper results were
disappointing.

Rio Tinto mined 190,100 tonnes of copper in the quarter, up 1
per cent on the previous quarter, but refined only 62,000 tonnes of
copper, down 20 per cent on the previous quarter.

Mr Pervan said he would be making an earnings downgrade for the
miner based on the figures, but still believed its half year profit
would be strong.